Key Steps For An Accurate Stocktake
May 04 2019
Performing a regular stocktake is absolutely essential for maintaining healthy inventory levels, minimizing losses and managing your profit margins.
But many hospitality based businesses find them to be time-consuming, energy-draining, and frustrating.
And without a clear, methodical plan, you face the risk of serious human errors such as over-counting or under-counting. These type of mistakes can lead to money losses and an erosion in your margins.
So, how do you stay organized and get things done quickly? By developing a well-structured stocktaking process you can cut down on costly mistakes. A well-structured stocktaking process will include all the steps required to efficiently uncover discrepancies and inaccuracies.
Below is a list of steps that you should consider when putting together a stocktaking plan for your business.
1. Schedule Your Stocktakes to Reduce Impact on Business Operations
Try to find a time that works for you and your staff that won’t hurt your bottom line or create unnecessary distractions. A lengthy stocktake is best taken during a slow sales cycle or outside of normal business operations.
2. Clean and Organize Your Stockroom Before Performing Your Stocktake
A clean and well-organized stockroom will make it easy to find and count your stock to reduce the possibility of miscounting.
Another measure you could take to make the stocktaking process more efficient would be to create well-defined sections by labeling the shelves that stock is and should be stored on, along with using package labels that clearly identify what’s inside the package.
3. Organize Your Stocktaking Tools Ahead of Time
Before you begin the stocktaking process, you’ll want to make sure everyone has the tools they need to get the job done.
Here’s a list of the most common tools used for stocktaking:
- Stock sheets
- Write-off sheets
- Handheld scanners
- Mobile Devices (if you use cloud-based inventory management)
You might need more or fewer tools than the ones listed, but this should give you a general idea of what’s generally required for an effective stocktaking process.
4. Only Use Up-To-Date Inventory Data
The goal of a complete stocktake is to get an accurate count of the inventory you actually have so that you can compare it with your existing inventory data.
So be sure to exclude items that have already been invoiced to customers but haven’t yet shipped, as well as raw materials that have arrived but haven’t yet been entered into your inventory system.
Stock that hasn’t shipped is essentially not yours anymore. Processing materials that haven’t been added into your inventory management system is a separate task that doesn’t need to be done during a stocktake.
5. Give Everyone Clear Goals and Responsibilities
A supervisor should be overseeing the stocktaking process at all times. They should have a list of what needs to be counted and what ought to be in their warehouse so they can double check the work of the stocktakers.
The stocktakers should know what groups they’re in, what tools they need, how they’re going to count the stock, etc.
Also, supervisors should make sure that there are practically zero distractions – that stocktakers aren’t distracting themselves with their phones or with too much conversation.
At the same time, if your stocktake is going to last a long time, it may be wise to schedule breaks to keep everyone’s minds and eyes fresh so that they don’t make too many mistakes.
6. Know What Stock You’re Counting and How You’re Counting it
Whether you have a massive warehouse filled with various types of inventory or a small stockroom with just a few types, let stocktakers know which sections they’ll be counting in what order.
Then, create a clear system for how they should physically count your stock.
Here’s an idea for how to organize the actual counting part of the process:
Each unit of stocktakers should be in groups of two—one person inspects the stock and calls out the amount, the second person records this and can double check the first.
If you have multiple units of stocktakers, make sure they all have clear sections to work through that don’t overlap.
Have your stocktakers to count in the same direction – i.e. top to bottom, left to right. Mark stock with a colored marker or pen as a visual reminder of what’s already been counted. With a similar process, your counting should be well-organized and operate smoothly.
7. Open and Count Absolutely Everything—No Guesswork Allowed
If you have a box that says it contains 10 widgets, don’t just take that label on face value. Open the box and count all of its contents to ensure it does contain that exact amount.
Your stocktaking process should aim to deliver as close to 100% accurate readings as possible, which means you shouldn’t estimate or guess on any number.
And be sure to record any discrepancies between the counts listed on your stock sheet and the number of items you counted, as well as any mislabeled/packaged boxes for quality control.
8. Value Your Stock Correctly
Once you’ve counted all your stock, make sure you have the most up-to-date prices for all of it.
The price of your stock should match the market clearing price or the price that consumers are willing to pay for that item.
And be sure to include any depreciation as well.
If you purchased a certain raw material last year for €1,000 but now it is only valued at €750 then you need to change prices to reflect the lower price – the same goes for older products you’re now selling at a discount.
9. Develop Ways to Decrease Stolen, Broken or Slow-Selling Inventory
During your stocktaking process, you may find that items you thought were in your warehouse were actually missing, and that some items that have been damaged or spoiled were never reported.
You might also notice that some items are simply not selling.
With this data in hand, you can begin brainstorming ways to increase security measures to protect against thieves, improve warehouse policies to curb reckless behavior and implement new strategies for selling more stock.
One sure-fire way to help in all these areas is through inventory reduction – creating a plan for optimizing the amount of inventory stored in your warehouse.
10. Continually Improve Your Stocktaking Process
Your stocktaking process shouldn’t be a static set of procedures; it should grow and evolve every time you do it so it becomes more efficient over time.
Encourage your stocktakers and supervisors to suggest improvements, develop new procedures for a more effective workflow, and brainstorm ways to decrease your stock to manageable levels that reduce waste.
But if you really want to improve your process, then consider investing in new technology that can streamline your stocktake and make it easy to track your inventory throughout the year.
Do you own or manage a hotel, pub or restaurant? We can help you increase your profit margins with our innovative food and drinks stocktaking systems. Call us today to discuss how we can help and book a free, no obligation demo.